Billboard Gets Snarky; Not A Believer In CwF + RtB

from the doesn't-make-it-right dept

On my flight to Midem a week or so back, I ended up seated next to Billboard editor Bill Werde. We had quite an enjoyable conversation about the music industry and business models. We didn't agree on everything, but we seemed to view the general issues from a similar point of view (i.e., we both think it's important to make sure that content creators get paid -- we just disagreed on what was likely the best way for that to happen). We talked a few more times during the course of the event and the whole thing was quite cordial. So, I have to admit a bit of disappointment at what seems like an attack piece from Billboard entitled "CwF+RtB = WTF?" in response to my recent post discussing many of the business models that are working for musicians these days. I'll take the blame here, and assume that I wasn't clear in some of the points on my post, leading to the attack by writer Antony Bruno (who I don't believe I've ever met or spoken to), which hopefully I can clarify here.

Masnick's basic premise is that record labels and publishers charge digital services too much for licensing content, such that they generate few users and eventually go out of business. He says they are too concerned with getting a fee for every use of their music (stream or download). And in doing so they are stifling music discovery and ignoring other ways to monetize music.

Well, that's not my basic premise at all -- which is much more focused on how individual content creators can make more money, despite the state of the industry today. However, it is true that, separate from that, I do believe that many of the established middlemen have set up a system that hurts many useful services. If you speak to those who once worked at any number of digital music services who were squeezed by the labels and publishers and no longer exist (imeem and Ruckus, to name two, though there are plenty more -- such as Spotify's inability to launch in the US is clearly due to this issue), I don't think this particular point is controversial or even refutable.

Meanwhile, as these efforts have contributed little to the bottom line, Masnick points to the example of nine artists who have eschewed this route and - without any label assistance - give away their music to draw attention to other unique products.

This is simply not accurate. Some of the artist did, in fact, have label assistance. I have never been against labels, at all. I am just in favor of more reasonable business models that involve a proactive decision by fans to support an artist. Also, not all of the musicians profiled chose to give away their music (though, I tend to think that the models where the artists do encourage that kind of thing work better). The idea of highlighting a few examples of artists who did it on their own, as well as those who were part of a label, was to show that this wasn't a pro-label/anti-label sort of thing. I apologize if that point wasn't clear, but Bruno's summary is not accurate.

They're about better connecting with the fans and then offering them a real, scarce, unique reason to buy -- such that in the end, everyone is happy. Fans get what they want at a price they want, and the musicians and labels make money as well. It's about recognizing that the music itself can enhance the value of everything else, whether it's shows, access or merchandise, and that letting fans share music can help increase the market and find more fans willing to buy compelling offerings. It's about recognizing that even when the music is shared freely, there are business models that work wonders.

The above I agree with entirely. This is basically a good summary of what I put forth. No disagreements here.

However while some artists have replaced the income gained through selling music with income gained from selling other products (such as music in different formats, concert tickets, merch and interaction), doing so is not the future of the music business. Yes, artists and labels need to find new, unique products that both better monetize the superfan and draw into the fold more casual ones as well. It's a good strategy. But it's no reason to stop pursuing licensing deals or ignore music copyrights, as Masnick suggests.

To be clear, I never suggested that anyone stop pursuing licensing deals. My concern over licensing was from the perspective of the various services, and the idea that there is some magnificent new licensing plan that will save the music industry. There isn't. Basic economics ought to tell you so, as you look at what it would take for a universal licensing fee to make the kind of money that the old guard thinks it deserves, and then do the math on who pays it and how it works, you'll quickly realize that it doesn't work. It's a red herring. It's the pot o' gold at the end of the rainbow that a bunch of folks are looking for and they'll never find. But, sure -- if musicians want to pursue licensing deals, more power to them. I say the same thing about trying to sell their music as well. If they can, more power to them, but it's not going to make a difference for almost all musicians, who will see so little from those kinds of deals as to be pointless. Instead, if they focus on their own business models, rather than relying on third party license groups, they're more likely to find success. Don't rely on the collection society fairy. Build a real business model.

The first problem with this argument is that not all artists can make money selling products other than music. The way some of the artists Masnick cites look for new revenue is a bit unsettling. Really, who wants to spend the day at Disneyworld with the kind of fan who pays $10,000 for the opportunity? And is selling off clothes and equipment really a model for aspiring artists?

If Billboard had sent a reporter to my session at Midem, they would have heard me respond to this. No one says that every musician needs to spend a day at Disneyland with a superfan as part of their business model. In fact, I said exactly the opposite. What I've said repeatedly is that part of what makes these models work is if they fit with that musician and the unique personality of that musician. My whole session was a workshop where we picked specific musicians and figured out ways that they could craft unique models that worked for them. I even made it clear in that session that the "go to Disneyland" package was the sort of thing that really worked for Josh Freese because of a close connection he, personally, had to Disneyland (his first gig was playing in the band there, and his father worked at Disneyland). It's the sort of thing that fits with Josh's personality, but no one else's. And that's what makes it special. Which was the point. And, yes, Josh actually did want to spend the day with that kind of fan, as was covered in the press coverage of the fan who did pay.

As for "unsettling," well, again, I'm a bit perplexed. If it was "unsettling" why did Josh Freese propose it? It clearly was not unsettling or he wouldn't have brought it up in the first place. If it's unsettling to other content creators, then they should focus on plans that are more "settling." And despite what Bruno claims, yes, all good artists have things other than music to sell. We've yet to find a single example of one who does not have something else to sell -- but if he has an example of someone who can't sell anything but music, we'd like to hear about it.

Some artists are better at self-marketing and promotion than others. Yet plenty of artists in both camps make music that's worth hearing. It's all well and good for artists who can't get or don't want a label deal to use this model to make a living.

Bruno seems to be confusing two separate things here. Again, we never said that musicians should ditch a label. In fact, some of the examples we used were label musicians (as stated above). And, we never said that musicians had to focus on self-marketing and self-promotion. In fact, we had a detailed post just recently about artists who don't want to do those things and how they can still take advantage of these types of business models. In fact, at the session I did at Midem, we even worked on some business model ideas for artists who specifically like to remain aloof from their audience, and we were overflowing with ideas.

But some artists simply want to make music and sell, and they shouldn't be branded as archaic or naive for feeling that way.

Why not? Look, some people just want to build and sell typewriters, and there's absolutely nothing wrong with that. But they shouldn't then complain when people aren't interested in buying the typewriters (or if it's a much smaller market than what it used to be). And they shouldn't be upset when they are branded as archaic because they're trying to sell something in a market that has moved on. Again, there's nothing wrong if a musician wants to sell music, but they shouldn't go running and complaining to the government that they need special new licenses or monopoly rights when there are plenty of business models open to them if they were just willing to adapt.

Second, the nine artists Masnick cites to support his theory are the exception, not the rule.

If there were any support for this claim, I'd like to see it, because I have yet to see any evidence of this whatsoever. First of all, ever since we first started writing about artists that have figured this out, we've been told that each example was an exception. The first artists were up-and-coming artists, and we were told that it only would work for up-and-coming artists, but not for big-time stars. Fine. Then we showed it working with big-time stars, and we were told that it would only work for big-time stars, and not up-and-coming artists. So we showed both together, and someone said "okay, maybe it works for up-and-coming artists and big-time stars, but no one in between." The reason that I chose the nine artists in that list that I wrote about was because they cover the spectrum all across the board from no name up-and-comers to big-stars and the middle class in-between. There are a lot more than nine such stories, and, as I told Bill during our conversation on the airplane, we receive so many examples of artists making this work that I don't write about most of them any more because it's not news. And that's because it's not the exception, it's the rule.

Furthermore, almost all of these examples came about in just the last two years or so. Given the way the system used to work, it definitely took a while for musicians to figure out ways to embrace and use these models to the fullest. And it's really only in the last few years that the tools for artists to connect directly with their fans have really reached the stage to make all of this viable. Given that, it's really quite stunning just how many musicians are making this work already. Claiming that this model is the exception rather than the rule sounds suspiciously like the horse buggy makers insisting that no one will buy automobiles because they're too noisy and smelly and they break down a lot.

Masnick is cherrypicking examples of artists who have followed his formula to success through research and asking his readers of his blog to send in examples. What he's not done is print a similar list of artists who have tried and failed under the same model.

How does one prove a negative? Despite what Bruno seems to be implying here, we have never claimed that this model is the sure fire way to success in the industry. Lots of musicians could put together this type of model and fail for a very good reason: they're just not that good. Lots of musicians never make a living because they're not very good and couldn't make a living no matter what the business model is. But that's rather meaningless isn't it? What would a list of failures show? All we're concerned with is helping content creators who want to make money understand the best ways to do so. Nothing Bruno says refutes that or explains why it doesn't work. And given how many artists are making this work, it's difficult to see what point he's driving at, other than he doesn't like what I have to say for some reason.

Thirdly, let's take a look at the part where he says music licensing schemes "make it less likely for fans to support bands directly, because the money is going elsewhere." It's a confusing statement that to me suggests the opinion that fans will only pay for an artist's products when all of the proceeds go to the artist rather than shared with a label. I find that very difficult to believe, and challenge Masnick to either present proof that this is the case beyond a small minority of copyleft and anti-label fanatics, or clarify the statement further.

I discussed this point at great length with Werde, and have written about it in great detail. It has nothing to do with, as Bruno suggests, that fans won't pay an artist if the money isn't going directly to them at all, and I apologize if that's what Bruno believed I implied. The point is that if everyone is forced into paying some sort of compulsory license, then a huge chunk of disposable income that would have gone directly to artists is now diverted into a giant bureaucracy that will not be nearly as efficient in paying those artists. Studies have shown that the amount of disposable income that consumers are paying for things in the music ecosystem has remained about the same (or maybe gone up slightly) over the last few years. But if there's a collective licensing scheme that takes $10 month from everyone, that's $120 per year of disposable income that automatically goes into the inefficient bureaucracy, rather than towards what a fan specifically chooses to spend the money on. It doesn't mean fans will stop spending elsewhere, but it shrinks the amount they will spend directly on bands, and that's my worry with those schemes. If we let the market sort this out, then fans get to make their decisions directly, and the content creators who adapt will do just fine. If we let some sort of collective licensing scheme come in, then we've distorted the market and the system will get gamed. This harms many musicians, though it may help some politically-anointed middlemen. I'd rather help musicians than middlemen, and I'd rather let the market decide, rather than any sort of mandatory or forced licensing system.

While connecting with fans and giving them unique products to buy is sound advice, there's no reason to throw the baby out with the bathwater. Masnick and the TechDirt blog is a staunch opponent of almost any plan to monetize not only music, but almost any other type of copyrighted content. That includes any blanket music licensing plan for ISPs (which he calls a "music tax ") and journalism paywalls, among other things.

This is such a misrepresentation of my position that I would ask that Billboard append a correction/retraction on it. I have no opposition to monetizing content. Perhaps Bruno did not read my post carefully, but I am very much in favor of helping content creators make money. But the problem is that the basic economics of the situation suggest that doing so directly by trying to sell something that is abundantly available is just not a very good business. My opposition to things like a music tax or journalism paywalls has absolutely nothing to do with being "an opponent of any plan to monetize... copyrighted content." It's because I don't think those plans will work and I think they do more harm than good. And with both the music tax and with journalism paywalls I have gone to great lengths to explain why -- not that Bruno shared any of those reasons.

Which brings me to my last point. My problem is not just with Masnick's formula (at least not all of it) but with the way Masnick goes about promoting it. It's agenda journalism. Any example that rises up to support his theory is treated as gospel; anything that pokes holes in it is dismissed as heresy (or outright ignored). Those challenging his conclusions wind up getting flamed in the comments section of the blog, as I'm sure many will do to this post here.

This is also a rather bizarre complaint as I am not a journalist and have never claimed to be a journalist. I'm sorry if Bruno wants to pretend I am one just to claim I am a bad journalist, but I really don't see the point. Yes, I have an opinion. So shoot me. And, it's also incorrect to claim that we treat examples in support as "gospel" and then "dismiss as heresy" anything that pokes holes in it. That's simply not true. If Bruno could point me to a single post where I "dismissed as heresy" proof that I was wrong, I would appreciate it. That would be incredibly counterproductive, as the goal here is to help content creators. Why would we ever want to ignore useful information about things that don't work? In fact, just recently, we had a very productive discussion about an effort to fund an album this way that failed. We looked at why it failed and ways to fix it. It wasn't that the model itself doesn't work (there's tons of evidence to the contrary at this point), but that it wasn't implemented well. Despite Bruno's claims that we don't discuss failures, we do, and we try to learn from them.

Masnick's formula is designed as a rationale for eliminating copyright protections and licensing laws. It's a tactic in his broader goal of copyright "reform." Now I believe there is a case for copyright reform as well, but not to the degree Masnick and his followers do (I'll save that for another post).

No, actually, the formula is designed for one reason and one reason only: to help content creators better deal with changing and turbulent times in order to help them make money and avoid making bad business model decisions. Separately, I do think they point to reasons why we don't need to ratchet up copyright and licensing laws to an even more draconian level, but I've seen nothing Bruno has to say that counters that.

Now I can't fault a reporter for trying to make a buck in these trying media times, but some become so personally invested in the viability of their theories that they are no longer able to take an objective viewpoint on their reporting. Masnick is doing the same here, making what he writes more about proving himself and his theory right than about exploring the nuances of the marketplace. It's just an easier sell.

Again, not a journalist. Again, always willing to explore nuances -- and have done so regularly. Unfortunately, there were none presented here to explore. I will note that throughout this whole post, at no point did Bruno explain why the model I discuss doesn't work. He just doesn't seem to like the fact that I've received some attention for it.

The music industry - and by that I include every element of the industry including labels, publishers, managers, artists, lawyers, etc. - is facing serious challenges. These challenges require serious thought, with rational consideration of all sides of an issue free of any ideology, not some catchy formula designed to promote an individual person or point of view.

Indeed. But the formula was never intended to promote me or any point of view. In fact, I had been really weary of using that "formula" in the first place. Honestly, the only reason I put it forth originally was because, years ago, when I presented my nuanced explanations of the economics at play, I was told that it was too complicated for an industry that wanted a simple formula. So I then put together a simple starter formula, hoping that it would help drive people into the more nuanced discussion, and what happens? Billboard attacks me for being too simplistic. Apparently, I can't win.

Also, the claim that I'm some agenda journalist pushing this formula to get myself attention is so ridiculous to anyone who actually knows me. I used the formula once and had no intention of even mentioning again, but it really resonated with many people (though, apparently not Antony Bruno), and so I kept getting asked about it, and asked to speak about it and to help content creators make use of it that I finally realized (against my initial feelings) that it was useful to a lot of people. I'm not sure why I need to apologize because people find it useful or for how it suddenly becomes me grandstanding. I'm sorry that people found it useful?

In the end, I guess I'm a bit confused about this writeup at Billboard. It doesn't present a single shred of evidence as to what I said that was wrong. At times it misrepresents my position, but mostly it seems that the writer just doesn't like that I'm getting attention for it.

Luckily, Bruno's view is actually not the view of many people in the industry. One of the nice things I learned at Midem was that there are lots of folks in this industry who are interested in understanding this model and who are talking to us to better understand how it works (nuance and all!). It's really too bad, because it's publications like Billboard that should be leading this discussion, not some random technology/business/policy blog.

"Thirdly, let's take a look at the part where he says music licensing schemes "make it less likely for fans to support bands directly, because the money is going elsewhere." It's a confusing statement that to me suggests the opinion that fans will only pay for an artist's products when all of the proceeds go to the artist rather than shared with a label. I find that very difficult to believe, and challenge Masnick to either present proof that this is the case beyond a small minority of copyleft and anti-label fanatics, or clarify the statement further. "

I have to pick out this bit to take exception to, particularly because it seems to target a argument I make frequently. I will state plainly that I am firmly against any business model that introduces inefficiency into the market by putting artificial barriers between my money and what I would like to buy. I don't want to pay £10 for a CD for £1 of that to go to the artist when the CD cost probably 20p. I recognise all the costs labels have in marketing and the like but it would be better for that to be paid directly by the artist rather than me, such things are good accounting if nothing else. I really do get the impression that my money is more likely to go towards artists I have no interest in than artists whose music I buy.

Extending the issue to licensing, I often repeat the fact that have a subscription to Magnatune. One of the primary attractions to the site is that the subscription is split equally between the site and the artists whose music I download there. I'll be explicit about this to make a point : Magnatune is a label. The fact that I pay a label £20 per month with 50% staying in their pocket is contrary to the 'anti-label' notion.

I will also point out that while I am supportive of copyleft licenses, I am no more supportive of them than other options such as (in software) the BSD licenses.

Reading the rest of Mr Bruno's article, I can't help but think how similar the style is to The Anti Mike. All that effort to contest what you have said with comparatively little effort put into backing up what he has said himself. I have and could continue to write pages and pages explaining why I believe limiting the buying power of consumers is bad; be I right or wrong, I am explicit in being so. He and TAM seem alike in their aversion to detail.

Re: of course he was polite

isn't every reporter excessively polite during the interview of which they actually plan to smear you as a moron? The answer is yes, consistently.

To be clear, my discussion with Werde and the post by Bruno were two separate people -- and I spoke with Werde and he says that he did not review Bruno's post before it went up. So while I believe Werde asked Bruno to write about my post, I don't think there was any kind of setup in my discussion with Werde.

Re: Re: of course he was polite

Succinct Mike .. your message needs to me more convenient. If someone really wanted to get the gist of the movement they would have to spend some time going over the archives. Rather they take a few choice snippets to paint the picture that they want. If they have an ax to grind, as this Bruno cat did, it's easy for them to pick out a few talking points and hammer away.

I suggest we, the community of IP reformist, the ones that make our living in IP, as you and I do, create a unified mission statement as to our cause. I make my living in the software business and thats one area that you would have no problem finding thousands of examples of ultra successful and truly clever business models that even poor Bruno can understand. He clearly exhibits zero capacity abstract cognition, taking every example and saying thats what you "believe", as if were all sitting around waiting to catch a comet.

I don't know this for sure, but I get the feeling that a lot of "expenses" that the record labels have are only expenses on paper. And that's why they don't want to go from a traditional marketing/advertising methodology to a CwF+RtB methodology involving getting the band's music spread as widely as possible. I suspect that the record label itself is the one performing a lot of the marketing and advertising work that gets deducted from the advance that the band received originally.

So obviously if they move to a model that doesn't require these expenses, the bands would be make more money and they would be making less. I would love for someone to ask the record labels whether they make a profit on the marketing/advertising work that they do for their bands. I bet they do, and I bet it's obscenely high.

Re:

When EMI was bought out by Terra Firma they had their books poured over. They found expenses to "fruits and flowers" and wondered what it meant. Turns out that "fruits and flowers" were euphemisms for hookers and cocaine.

You've got to love the recording industry!

"Don't infringe our copyrights, it's against the law." Aren't hookers and cocaine against the law, too?

I notice your views have been static clear and confident for some years Mike.... but not so confident that you would put your own money where your mouth is and transform the music industry yourself, I guess it's safer to make your money just blogging.

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"I notice your views have been static clear and confident for some years Mike.... but not so confident that you would put your own money where your mouth is and transform the music industry yourself, I guess it's safer to make your money just blogging."

Is this an ironic reference to Mike's own CwF + RtB scheme or concentrated ignorance? I'd like to know if you're trolling or joking before I address your point.

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It seems like he is putting his "money" where his mouth is by MAKING MONEY JUST BLOGGING. CwF=RtB should work in many industries. Mike is already applying it to his own. Does he have to fix everything?

What kills me is that people argue as if there is any alternatives to the direction the music industry is heading in. The industry is going to change despite any arguments to the contrary. CWF + RTB isn't a choice, it's inevitable.

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Historically, see the newspaper industry, the TV industry, the radio industry, the cinema industry.

The provide a way to Connect With Fans (giving their "product" away below costs...lot of it for free) and giving their customers (advertisers) a Reason To Buy.

I know, I know...sounds like the definition of "fan" and "customer" are separate whereas the record labels view them as the same thing. For the above industries, they were very different things.

Artists need to get a handle on who their "fans" are, who their "customers" are, and decide how to grow both groups (which hopefully are heavily overlapping...but not necessarily so).

Imagine an artist who creates a massive audience but actually only makes money by being paid by a corporation to promote the corporate product. Image a company like Pepsi, The Disney Channel, GM, or Elizabeth Arden pay an individual hundreds of thousands/millions of dollars just for being popular and talking about the company product....what a ground breaking, unprecedented innovation that would be.

CwF + RtB epiphany

I just realized, after all this time, just WHY I became a "die in my tracks for them" fan of Baen Books. They have, in effect, been following this model for a decade with their eBooks and "Baen's Bar"(bar.baen.com).

Connect with Fans: The Bar does that, in spades. It's a place to share news, discuss the books, both with each other *and* with the authors, and the publisher even has a forum of her own, where she regularly fields questions and gathers comment. Between Toni and the authors, it is made quite plain that we're not dealing with a faceless publishing entity filled with (shudder) suits.

Reason to Buy: Some eBooks are available free, with option to pay to support the "Baen Free Library." Others are available in monthly "bundles" at $15 a pop, with individual eBooks at $6. Plus "Advance Reader's Copies" at $15 for early access to not-yet-ready-for-prime-time books.
Every book arrives as an eBook, generally (you listening Macmillan) arriving two weeks ahead of the paper books, including hardcovers.

And, everywhere and always, no DRM. A lot of people treat the eBooks as samples. Read some ("Hey, this is GOOD!) and go out and get paper. Others, like me, buy every eBook they can afford, read every eBook they have time for, and tell people about them. The wall outside my office has color copies of the book covers for eBooks I've read, and I'm not shy about explaining why I liked them. ("Run! Geoff just put up a new cover!")

Baen has, by all accounts, made money from eBooks since day zero, and has seen year-over-year sales increase even in this economy.

Well, I finally got through it all. In general it sounds like Mr. Bruno doesn't quite know what he is talking about most of the time. my favorite snippet("...small minority of copyleft and anti-label fanatics...") was spectacular. because i believe that our current copyright system is screwed up and because i prefer a free culture(copyleft) and I dislike the way labels in general treat consumers, the artists, and the law is wrong, i am labeled a "fanatic".

Well, Mr. Bruno, guess what? I am a fanatic and baseless insults won't change that. You and your kind need to change or be removed.

I am sick and tired of corporate whores acting like me and people like me who are copyleft advocates are trying to destroy the modern world. We aren't. All we want is to be free of corporate influence at every turn. I see (c), (r), and (tm) more times a day than i do anything well written. People go out of their way to make sure you know X product is covered by ten different government-mandated-monopoly laws, and patent pending(also trademarked just in case).

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I am sick and tired of corporate whores acting like me and people like me who are copyleft advocates are trying to destroy the modern world. We aren't. All we want is to be free of corporate influence at every turn.

I definitely agree with you that the 'Digital Barbarism'-style characterizations are tiresome, but I think you're making too sweeping statement here, and may be conflating 'copyleft' with just 'left'. I'm strongly pro-capitalism and pro-corporation, but that's why I'm also strongly in favor of copyright/trademark/patent reform. Government enforced artificial monopolies are antithetical to a healthy capitalist marketplace. I imagine there other reform supporters who feel similarly.

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dude, i am all over the place. I am anti-government and anti-business. I don't know if that puts me on the right or left. I think the government needs to stay the hell out of my life and that large corporations should too. I just want to live, ya know? Without having to worry if the government is trying to protect me from myself, or big business is trying to sell me shit i don't want 24/7.
Ever read Walden? It is scary how much hasn't changed in nearly 200 years.

Journalist

I think you're protesting too much about not being a "journalist."

Wiki: "A journalist collects and disseminates information about current events, people, trends, and issues. His or her work is acknowledged as journalism.
Reporters are one type of journalist. They create reports as a profession for broadcast or publication in mass media such as newspapers, television, radio, magazines, documentary film, and the Internet."

Re: Journalist

"I think you're protesting too much about not being a "journalist.""

As you quote from wiki, I quote from wiktionary:

"The style of writing characteristic of material in periodical print publications and broadcast news media, consisting of direct presentation of facts or events with an attempt to minimize analysis or interpretation"

While you could argue that the mere fact of aggregating the news and such falls under the wider definition of journalism, most professional journalists would probably prefer that you didn't.

The key point is that Mike does not claim to be a journalist, a word which in the traditional sense confers a notion of impartiality. Mr Bruno's article calls Mike's blog "agenda driven journalism" which makes a suggestion that Mike is being dishonest in mixing opinion with news. If you click the 'about us' link at the top of this site you will see "analyze and offer insight into news stories", rather than 'reports news stories' as a journalism driven site might say.

Re: Re: Re: Journalist

Unfortunately even the overly loved BBC isn't as good as it thinks it is at professional journalism. Still, if you contrast it with Fox News you get an idea of what the word means; BBC tries to be journalism whereas Fox News pretends to be journalism. Mike does neither.

Journalist

Mike -

I think you qualify as a journalist in the same sense that Michael Arrington is a journalist with TechCrunch - sure, you are more invested in a position, but don't sell yourself short - you still provide meaningful analysis here (alright, maybe 'editor' is more accurate).

Really it doesn't matter because Bruno seems to be just as invested in his view as you are in yours (RIAA shill???)

I think it's funny that people don't understand that this is an OPTION. Just like I have the OPTION of either going to Sam Goody for albums (which I rarely do), buying them from iTunes, downloading them on BitTorrent, or buying them at the local used music store. All of these are OPTIONS, and you do whatever works for you - in the end, whichever works for the most amount of people the most amount of time will probably win out, unless there the gubmn't decides to get involved and be arbitrary about it.

Selling directly to your fans is an OPTION, Bruno, as is signing with a label. Hell, it's an OPTION to hand out thumb-drives on the street with tunes on them, or drop burned CD's from a helicopter over a school zone... WHATEVER!

It come's off as the worst industry apologetics to simply dismiss every alternative to the traditional - let the people with the money decide which works best for them.

Re: Journalist

Selling directly to your fans is an OPTION, Bruno, as is signing with a label. Hell, it's an OPTION to hand out thumb-drives on the street with tunes on them, or drop burned CD's from a helicopter over a school zone... WHATEVER!

It should be an option, but it shouldn't be forced upon artists or rights holders. End consumers should not be deciding what is free and what isn't, and they shouldn't be deciding which business model is right or wrong (and then supporting none of them).

I notice Mike didn't run the ARStechnica story that showed that 99% of the material on a given torrent site was illegal. But that would be just the wrong message.

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So is money.

Actually, not true at all. Money is a representation of value -- and while the government has a control over the federal money supply, it does not have control over the actual value, and there are many forms of alternative currencies.

But, more to the point, even if you limit "money" falsely to "dollars" the government cannot arbitrarily increase what that money really represents. If it floods the market, we get inflation, which is the monetary supply shifting to deal with the actual scarcity of value.

So, no, not the same thing.

So are trademarks.

No, trademarks are not monopolies by any stretch of the imagination. They are a form of consumer protection to keep Bob from Michigan from claiming that his cola is Coca Cola. It's not a monopoly right at all.

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I'm just a bystander, but saw this little exchange. Mike, how would you like it if someone setup a shop and made a bunch of T-Shirts for your fans? You should know by now that merchandising is where the money is. It looks like someone else pitched the idea of pizza-themed T-Shirts a few weeks ago and you didn't offer them. Where's them marketing people??

Well, there are many people who can make T-Shirts and hats for your fans. Here are a few samples:

First, I have "Truthiness". In this work, the artist attempts to find a real reason of the hat's existence.

Once we pass by that, we can have some fun:

This one I call "Epxert" It's expertly silk screened words on a white canvas alongside the Techdirt Logo. The first 20 will be individually signed by GeneralEmergency.

Next, I call this work "Banned Forevah". Only by looking carefully at the incredibly small print on the left hand side, you can find the reason why Mike Masnick is the undisputed king of the world. But you have to buy it to see the secret message. (It's really small)

I call this one "Not Really Angry" In this piece, the artist attempts to capture through facial expressions what the angry dude accomplishes. The first 10 will be signed by an angry dude, but not necessarily Angry Dude.

There are others, for example, a pizza themed one among others There's ten available in that series. Collect them all!

Lastly, there's the Anonymous Coward Collection. In it, you'll get a blank envelope with nothing in it. LIMIT 3. NO MORE THAN 3. THAT'S IT. $250 a piece.

Make no mistake, whatever you think about Mr. Masnick and Techdirt, the underlying business model is quite hard to assail. Largely because sustaining it involves nearly no risk whatsoever. Any money that comes in is basically pure profit.

Trying to profit off someone else's content might make sense if the market for the goods you're selling includes rational people. By rational people I mean those that won't spend $15 for an "authentic" T-shirt when an absolutely identical knock-off is available for $10. Those, unfortunately for you, are not the readers here. In fact, most people who would buy a Techdirt T-shirt would almost certainly spend the $15 on the "authentic" one just to spite you. You'd probably increase sales for the "official" shirts.

Most of the "bundling" business models rely on 1) charity, 2) first-mover advantage coupled with 3) apathy of competitors, and 4) irrational consumers. It's the same reason that name-brand drug makers still get people to buy their stuff when a chemically-identical generic is available right next to it. I guess it works for them.

Were you to actually set up shop AND have someone here acknowledge your existence, I would also be ready for some not-so-subtle innuendos that your shirts (whatever they are made out of) are inherently inferior to the nearly magical quality of fine American Apparel merchandise.

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He'll probably tell you that this is wonderful because you're bringing additional attention to his brand, and that it's awesome that you're doing "market research" for him.

Indeed. Because that's accurate.

Make no mistake, whatever you think about Mr. Masnick and Techdirt, the underlying business model is quite hard to assail. Largely because sustaining it involves nearly no risk whatsoever. Any money that comes in is basically pure profit.

Ouch. "No risk whatsoever"? What does that mean?

I have to admit that's pretty insulting and makes me realize that you've probably never run a business yourself to ever claim that another business owner's business has "no risk whatsoever." How insulting. No wonder you comment here every day and refuse to identify yourself.

Trying to profit off someone else's content might make sense if the market for the goods you're selling includes rational people. By rational people I mean those that won't spend $15 for an "authentic" T-shirt when an absolutely identical knock-off is available for $10.

Have you ever taken economics? It does not appear that you understand what "rational" means within an economic context. The reason that people would buy the authentic t-shirt from us is because a large part of the marginal benefit received is from supporting a site they like. That is quite rational. It's only those folks who don't understand basic econ who think that rational means "cheapest."

Most of the "bundling" business models rely on 1) charity, 2) first-mover advantage coupled with 3) apathy of competitors, and 4) irrational consumers.

Wow. I've always thought you were at least somewhat less troll-like, but to post something like that and demonstrate such incredible willful ignorance of economics? Please, Doctor Strange, time to pipe down on econ until you've at least passed the first semester.

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Hey Mike,

Maybe I read into this all wrong, but I got the feeling that Doctor Strange was supporting you...not criticizing. I realize that there is substantial risk in producing merchandise, but I didn't see him as being sarcastic or snarky. And I agree that buyers are not irrational for considering things other than money (my background is basic game theory), but that's not a hard mistake to make.

I don't know if there is some history with this person, and I may be reading the comments wrong, but it seemed to me like s/he was trying to be supportive of you and your response seemed a little snappy.

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I have to admit that's pretty insulting and makes me realize that you've probably never run a business yourself to ever claim that another business owner's business has "no risk whatsoever."

It's not an insult, it's a particular business choice. The question is, if this site stopped existing tomorrow, how far in the hole would you be? Would you need to declare bankruptcy? What's your monthly nut? Maybe I'm misunderestimating it greatly.

It depends on what you mean by "never run a business yourself." I have always held a day job, but I have been a consultant and I have marketed products on the side. I paid self-employment tax and the IRS was pretty sure I was running a business, so that counts a little. I am pretty risk-averse. In consulting arrangements, the only risk I took was my time - which is to say not very much at all.

In marketing goods, I partnered with a firm that took all the risk for me (and, as such, reaped most of the profit - but then again they took all the risk). Had the products not sold at all, the partner firm would have been out a modest amount and I would have been out nothing; as it was they sold modestly and we both came out in the black (my partners more than me). In that case, the only risk I took was my time and the risk of not making as much as I would otherwise - which is, to say again - not very much at all.

These contributions to the world of commerce were tiny indeed. Low risk, low payoff for me and society. Contrast that to, say, the studios and investors that financed Avatar to the tune of $300-500M. That is a real risk. When a newsgathering organization spends tremendous amounts of money to send and support reporters abroad, that's a real risk. When somebody pays producers, engineers, and studios thousands of dollars to record an album, and hundreds of thousands to market it, that's a real risk. When somebody spends $200,000 of their own money to make a movie - not including their time - that's a real risk. All of those, of course, produce works and impacts far beyond what my "nearly no-risk" businesses could produce. I can scarcely call my efforts "businesses;" they're more like the adult version of mowing lawns on Sunday.

My adult lawnmowing, nearly-zero risk businesses were also unassailable. What did I have to lose if a competitor started horning in on my action? Some wasted time? A little extra frustration? What did I have to lose if somebody else started somehow taking my work and making a profit off it, illicitly or otherwise? Nothing. I had nothing invested. It's a smart way to go. It results in few spectacular outcomes, but it's quite safe.

If I have misunderestimated the amount of investment it takes to run the Floor64 enterprise, I apologize. If you'd care to offer additional insight here, we're all ears. I too have run websites and blogged in the past (although the traffic wasn't within several orders of magnitude of the scale I'm sure Techdirt gets) but the overall investment to run the whole operation was really quite small and, had I been short on cash, could have been offset by reducing my consumption of, say, Doritos.

It does not appear that you understand what "rational" means within an economic context.

No, I understand what it means in that context, I was using it in my own context, which I took care to define so as not to confuse people. Guess it didn't work.

Wow. I've always thought you were at least somewhat less troll-like, but to post something like that and demonstrate such incredible willful ignorance of economics?

1) Charity

In the post immediately before this one, you said:

But most people are smart enough to know not to support the knockoff vendor, since part of the goal of buying merchandise is to support the original content creator.

If you give someone money to support their cause, getting "good feelings" but not any tangible return, how is that substantially different from charity?

2) first-mover advantage coupled with 3) apathy of competitors

If you take charity out of the equation, and you're bundling a private good with a public good to increase the private good's value, then you're relying at least partially on being the only one offering that private good. From Wikipedia:

It can be shown that the provision of the public good increases when tied to the private good, as long as the private good is provided by a monopoly (otherwise the private good would be provided by competitors without the link to the public good).

So this works well as long as you're the sole producer of the private good. Assuming you don't have a natural monopoly on the private good (e.g., personal appearances or personal performances) then what you have to rely on is the time in between you bringing the private good to market and your competitors (that is, 2) first-mover advantage) and the unwillingness of your competitors to enter the market (that is, 3) competitor apathy). In cases where you bundle intangible good feelings with your private good, that's more interesting, because that's a way you can create a "distinct" product that you monopolize. I put "distinct" in quotes because the distinction exists only in the mind. That "distinction" is respected by 4) irrational (by my definition, not yours) consumers, who will pay extra for a physically identical item because it makes them feel better.

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To elaborate slightly:

I am an average schmuck. Maybe slightly above average in my contribution and impact on society, but only slightly. I worked pretty hard and have a nice day job where I make good money. Not enough that I will be able to retire more than a few minutes early, but good enough. Very, very rarely, my contributions make a positive difference in the lives of, say, a few thousand people. Most often the number is closer to ten.

Compared to me, there are people out there that make a positive difference in hundreds of thousands or millions of people's lives every single day. Even if their impact is not so big yet, they are at least creating incredible works of art that go far beyond anything I could ever imagine creating. These include:

From my perspective, these people are tremendously more valuable to society than I am. What they have in common is that, although I am not in any way privy to their financials, I'm not sure that many of them are substantially better off than I am (and I fear that some of them aren't better off at all!)

Maybe I'm wrong, and Randall Munroe is drawing the next XKCD from his private jet with a gold-tipped unicorn-feather quill. Maybe the unicorn feather came from Mike Masnick's private stables. But I fear not.

This is wrong. This is not OK. These people should be society's rock stars. They should work far less and make far, far more than me. When you can have that big an impact on society, and the rewards are commensurate with those apportioned to an average schmuck, what does that say?

Should we celebrate the market that results in this outcome, or wonder what the hell went wrong? What does it portend for people that are slightly less great at what they do?

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I'm just a bystander, but saw this little exchange. Mike, how would you like it if someone setup a shop and made a bunch of T-Shirts for your fans? You should know by now that merchandising is where the money is. It looks like someone else pitched the idea of pizza-themed T-Shirts a few weeks ago and you didn't offer them. Where's them marketing people??

You would not be the first. Others have offered Techdirt merchandise in the past. But most people are smart enough to know not to support the knockoff vendor, since part of the goal of buying merchandise is to support the original content creator.

But if you want to make those clothes, go right ahead. We'd be interested in seeing which ones sell well, so that we can make use of that knowledge ourself.

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Well then... EXCUUUUUUUUUUUUUUUUUUSE ME. You seem to have a little snarky in yourself.

I was thinking about setting it up as a joke and then sending $15 to be a Techdirt insider, along with the logins to MIKEDIRT to Mike Ho, who has been employee of the month for the past 8 months, I presume.

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Actually, not true at all. Money is a representation of value -- and while the government has a control over the federal money supply, it does not have control over the actual value, and there are many forms of alternative currencies.

The federal reserve unquestionably has a monopoly on printing dollars. No one else can print dollars under penalty of the law even though the technology exists to do so and is only getting better. The Federal Reserves exclusive right to print dollars is a monopoly no matter how much you wish it wasn't.

No, trademarks are not monopolies by any stretch of the imagination. They are a form of consumer protection to keep Bob from Michigan from claiming that his cola is Coca Cola. It's not a monopoly right at all.

Wrong again.

Just because it's a form of "consumer protection" does not negate the fact that trademarks are monopolies. Copyright could also be considered a form of "consumer protection" using the same sort of example: to keep Karl from Kentucky from claiming his movie is the sequel to Ghost Busters...

Trademarks, like copyright, are a set of exclusive rights rights given to the rights holder to exclude the competition from using their brand related intellectual property, and that too is a monopoly no matter how much you wish it wasn't.

"Trademarks are essentially limited monopolies over the use of symbols in business. The government grants trademark owners the right to exclude all other businesses from using a similar mark on related goods or services."
(http://marklaw.com/trademark-FAQ/faqbasic.htm)

"Intellectual property (IP) is a term referring to a number of distinct types of legal monopolies over creations of the mind, both artistic and commercial, and the corresponding fields of law.[1] Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs. Common types of intellectual property include copyrights, trademarks, patents, industrial design rights and trade secrets in some jurisdictions."
(http://en.wikipedia.org/wiki/Intellectual_property)

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The federal reserve unquestionably has a monopoly on printing dollars. No one else can print dollars under penalty of the law even though the technology exists to do so and is only getting better. The Federal Reserves exclusive right to print dollars is a monopoly no matter how much you wish it wasn't.

The claim was that money was an artificial gov't created scarcity. Not dollars. What you describe above is dollars.

However, I did explain to you why even that is not an artificial scarcity, since money is a representation of value, and the actual value of dollars changes to match the overall value, meaning that the scarcity (value) is real, no matter what the amount of dollars on the market.

Which is what I explained originally. And you ignored. Weird.

Just because it's a form of "consumer protection" does not negate the fact that trademarks are monopolies.

Nope. Trademark is not a monopoly at all. Claiming it is is a fundamental misunderstanding of trademark law.

opyright could also be considered a form of "consumer protection" using the same sort of example: to keep Karl from Kentucky from claiming his movie is the sequel to Ghost Busters...

No, that's false. Copyright comes from the copyright clause. It has no consumer protection aspect whatsoever. It is designed for one thing only, which is to promote the progress, and the mechanism for doing so is a gov't granted monopoly.

Trademark, on the other hand, is not a monopoly at all, comes from the commerce clause, and is a measure of consumer protection against confusion. It does not create an actual monopoly though a number of folks have recently tried to turn it into that. They are, however, wrong.

Trademarks, like copyright, are a set of exclusive rights rights given to the rights holder to exclude the competition from using their brand related intellectual property, and that too is a monopoly no matter how much you wish it wasn't.

Copyrights, absolutely. Trademarks, not at all. they are not an "exclusive right" because anyone can make use of the mark, so long as it does not create consumer confusion. Again, the purpose is consumer protection.

"Trademarks are essentially limited monopolies over the use of symbols in business. The government grants trademark owners the right to exclude all other businesses from using a similar mark on related goods or services."
(http://marklaw.com/trademark-FAQ/faqbasic.htm)

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The claim was that money was an artificial gov't created scarcity. Not dollars. What you describe above is dollars.

Am I to assume then that you have just quietly conceded that the Federal Reserve does indeed have a government-granted monopoly on printing money?

That's what I call progress!

And I still have to disagree with your opinion that because money is a "representation of value" its value is thus not artificially fostered. Your own verbiage, "representation" speaks to its inherent artificiality, the fact that it is no longer backed by anything tangible speaks to its inherent artificiality, and the fact it requires MONOPOLY PRINTING RIGHTS to function properly speaks, loudly, to its inherent artificiality.

Nope. Trademark is not a monopoly at all. Claiming it is is a fundamental misunderstanding of trademark law.

Heh.

It's funny how many antitrust issues have sprung up in the courts with something so apparently distant from a monopoly right...

Copyright comes from the copyright clause. It has no consumer protection aspect whatsoever.

Who said it did? Not me. Unfortunately for you, the reverse isn't true. The purpose of trademark law is not solely consumer protection as it seems you would like to believe but also to protect rights holders against unfair competition as defined by the Lanham Act. There is nothing anywhere to indicate trademarks are ONLY for the protection of consumers. If you've read any of the decisions, you'd see they seem to be written almost universally from the right holders point of view rather than the end users. Odd.

And you do realize trademarks first became an issue in the United States upon complaint from companies, not consumers, correct? Funny how such a consumer centric law as you portend could be rooted so firmly in the complaints of businessmen, not consumers...

Trademark, on the other hand, is not a monopoly at all

Please explain why not. So far, you have completely neglected to do so.

And don't start up again on how it's for "consumer protection" and is thus not a monopoly. The supposed "intention" of a monopoly-right (which it intrinsically is, by literal definition) does nothing to negate monopoly status.

It does not create an actual monopoly...

Ah, I spy with my little eye a weasel word...

I would love to hear what your magical definition of an "actual monopoly" is, in any case.

While you're at it, please explain how Coca-Cola DOESN'T have a monopoly on the Coca-Cola soft drink whereas Lightstorm Entertainment DOES have a monopoly on the Avatar movie.

Maybe you could also shed some light on the apparent differences between your "Bob from Michigan's Coca-Cola soft drink impostor" versus my "Karl from Kentucky's Ghostbusters sequel impostor" examples. Why does one require "consumer protection" and the other one doesn't?

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You continue to interchange dollar with money, and it's making you look silly.

The purpose of trademark law is not solely consumer protection as it seems you would like to believe but also to protect rights holders against unfair competition as defined by the Lanham Act.

Only for the sake of protecting consumers.

Please explain why not. So far, you have completely neglected to do so.

I have every right to use the phrase Coca-Cola so long as it is not confusing to the user. There is no monopoly against it. I used it here with no problem at all.

hile you're at it, please explain how Coca-Cola DOESN'T have a monopoly on the Coca-Cola soft drink whereas Lightstorm Entertainment DOES have a monopoly on the Avatar movie.

Oh look. Even you used it! And of course each company has a direct monopoly on the product they produce. But what they don't have is a gov't granted monopoly. I'm a bit surprised you're confused by the difference.

I await your answers.

No, you don't. Because you have no interest in having a serious discussion about this and you seem to be rather clueless about basic economics and the law. For shame. It could have been an interesting discussion, but there is little reason to engage with you any further.

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You continue to interchange dollar with money, and it's making you look silly.

Let me correct my typo so you can't ignore the question again: "Am I to assume then that you have just quietly conceded that the Federal Reserve does indeed have a government-granted monopoly on printing DOLLARS?"

Only for the sake of protecting consumers.

Prove it. Cite some relevant passage of law that says trademarks are ONLY for the protection of consumers. I can't wait to see it.

I have every right to use the phrase Coca-Cola so long as it is not confusing to the user. There is no monopoly against it. I used it here with no problem at all.

What does that have to do with anything? You are grasping for straws with this obvious straw man. Saying that because you or I can invoke the trademarked brand "Coca-Cola" in everyday speech or on public forums like this blog somehow invalidates its monopoly status is asinine.

The real question is can you produce a soft drink (although it doesn't end there by a long shot) called Coca-Cola? The answer is, of course no, and the reason is that there is a government granted monopoly against doing so, and if you infringe against this government granted monopoly you will be sued, not by some class action lawsuit or other such aggrieved body of consumers but by the company itself acting on its own behest without any sort of originating consumer complaint at all. That sure is an odd way for a supposedly consumer protectionist law to work don't you think?

And of course each company has a direct monopoly on the product they produce. But what they don't have is a gov't granted monopoly.

And you STILL have not provided any evidence or rational reasoning for this opinion. Please explain how copyright is a government granted monopoly whereas trademarks are not.

Again, what is the difference between Coca-Colas massive library of government granted exclusive rights pertaining to countless numbers of images, packaging styles, name brands and mottos versus Lightstorm Entertainment's government granted exclusive right to the movie Avatar?

No, you don't. Because you have no interest in having a serious discussion about this and you seem to be rather clueless about basic economics and the law. For shame. It could have been an interesting discussion, but there is little reason to engage with you any further.

So you're backed into a corner and looking to find any way out that you can? I understand and I predicted this would be your "response", the politician duck, dodge and evade as they say. The questions I've posed are troubling and no doubt you will continue to ignore them for as long as you can because their answers draw uncomfortable parallels and pose a conflict with your usual rhetoric so it's only natural that you try to weasel your way out of confronting them honestly and then (try) to cover up your retreating tracks by accusing the questioner of not having "serious" intentions. If you were actually capable of providing clear concise reasoning for why trademarks are not monopolies, or how the Federal Reserve doesn't have monopolist printing rights with regard to DOLLARS I would be more than happy to admit I was wrong and move on.

The problem is you don't seem to be capable of this. And that is a failing not of my intentions but of your own dogma and perhaps more specifically with what Bruno was referring to concerning an apparent internalization of the issues to such a degree that objectivity is diminished.

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Let me correct my typo so you can't ignore the question again: "Am I to assume then that you have just quietly conceded that the Federal Reserve does indeed have a government-granted monopoly on printing DOLLARS?"

Oh sure. That was never in question. Of course, it wasn't what you said at first. Yes, the gov't has a gov't granted monopoly on printing dollars. So what?

Prove it. Cite some relevant passage of law that says trademarks are ONLY for the protection of consumers. I can't wait to see it.

You are aware of the history of trademark law, right? If so, you would know that this is a fact.

What does that have to do with anything? You are grasping for straws with this obvious straw man. Saying that because you or I can invoke the trademarked brand "Coca-Cola" in everyday speech or on public forums like this blog somehow invalidates its monopoly status is asinine.

Not asinine. Accurate. But I can see when you are proved wrong that you react by spurious insults. It's not particularly convincing. It suggests why the folks you work with are in this mess. You are not interested in learning.

The real question is can you produce a soft drink (although it doesn't end there by a long shot) called Coca-Cola?

Of course not. Because it would confuse consumers. It's got nothing to do with the gov't saying you should have a monopoly.

if you infringe against this government granted monopoly you will be sued, not by some class action lawsuit or other such aggrieved body of consumers but by the company itself acting on its own behest without any sort of originating consumer complaint at all. That sure is an odd way for a supposedly consumer protectionist law to work don't you think?

Hmm. No, it doesn't seem odd at all. It makes perfect sense, since the party that can most articulate the potential confusion would be the company faced with the issue. Right? Or am I missing something?

Again, what is the difference between Coca-Colas massive library of government granted exclusive rights pertaining to countless numbers of images, packaging styles, name brands and mottos versus Lightstorm Entertainment's government granted exclusive right to the movie Avatar?

Oh that's easy. Because copyright law gives the copyright holder a gov't granted default "thou shalt not." It's a blanket ban with a few small exceptions squeezed in over the years. Trademark is no such thing. It is a specific tool for a specific purpose that has nothing to do with a blanket ban against use.

I'm sorry if you want to misinterpret trademark law into something it is not. I recognize that a few lawyers have been pushing for this sort of interpretation and twisting of trademark law for a few years now. It doesn't make it right.

So you're backed into a corner and looking to find any way out that you can?

No sir. Not at all. My position is backed up and supported clearly. But it became clear quite some time ago that you were not interested in discussing this like an adult, so I didn't see much point in responding. I'm afraid that once again I have needed to waste my time on your responses is again, but I see no reason to do so further. I'm truly sorry that you dislike what I have to say. It does not change what is happening.

It was nice chatting with you, but I am no longer replying to this thread as it is clearly counterproductive. You will say whatever you want to say, but clearly have no interest in discussing this, but only wish to make silly claims like saying something that is factually accurate is "asinine." My time is valuable and I will not waste it on you any further in this thread.

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Trademark is about authorship (identity of manufacturer), and authorship constitutes a natural monopoly.

If Fred makes a vase then only Fred can truthfully claim that he made the vase. The government doesn't grant him this monopoly. Nature imbues him with it. The government is supposed to protect Fred's natural (aka moral) right to identify himself as the maker of the vase, and thus to deny anyone else from making false claims (identifying someone else as maker of Fred's vases, or identifying Fred as the maker of vases he didn't make).

Fred can mark his vases with a unique symbol or name to indicate his authorship, to identify himself as the manufacturer.

Trademark law is about a government regulated registry of such marks to avoid the same symbol being used in the same trading context (by different manufacturers) such that authorship risks becoming confused (in the marketplace). So, there is a small element of government granted monopoly in that the manufacturer who first registers a particular mark for a particular product in a particular context is able to prevent others using that mark where that risks confusing the identity of the product's manufacturer.

The problem with trademark is that holders overreach its purpose to prevent confusion and deceit, and attempt to claim exclusive use of their mark in all contexts. For that reason trademark law needs reforming, possibly even abolition.

Even so, even without the trademark registry, it should still be prohibited to deceive people (intentionally or through negligence) as to the identity of a product's manufacturer.

Branding of cattle with unique symbols is similar, though concerns the identity of the breeder or owner rather than the manufacturer.

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End consumers should not be deciding what is free and what isn't, and they shouldn't be deciding which business model is right or wrong (and then supporting none of them).

It doesn't matter what "should" and "shouldn't" be done, it's what "is". The value of music has dropped to zero (financially speaking). We can argue moral imperatives all day but, in the end, the industry and artists WILL have to cater to the consumer in a way that the consumer wants if the artists and industry want to make a living. That's the way it is.

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That Ars Technica article was based off of an "illegal" torrent site to begin with. Why weren't there any Linux distros or public domain content? Because legitimate torrents are run off of sites that are legitimate so there is no need to run them off of "illegal" torrent site.

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"It should be an option, but it shouldn't be forced upon artists or rights holders. End consumers should not be deciding what is free and what isn't, and they shouldn't be deciding which business model is right or wrong (and then supporting none of them)."

So, we have you officially on record that you hate Capitalism? Awesome.

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Jeff, read carefully. Consumers decide which business models are right and wrong by supporting the ones they like. If you like shiny plastic discs, you buy from shiny plastic disc companies. If you like digital files, you take your stuff from digital download sites. The public makes their choice by spending their money (or their valuable time) with those companies which offer their preferred business model.

Where I object is when the business models are selected not by actual user. That is why I said "and then supporting none of them"). Nothing like having someone tell you how to run your business, and then not buy your products anyway.

It is a situation that doesn't follow basic rules of commerce or economics.

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"End consumers should not be deciding what is free and what isn't, and they shouldn't be deciding which business model is right or wrong."
Sounds like your knowledge in economics is severely deficient. A central tenet of basic economics is that consumers decide what goods and services they spend their hard-earned income on ("voting with their wallets"). The "efficient mix" of goods and services produced is determined by the will of the consumer as such.
When considering the price of a good or service, the law of supply and demand comes into play. When there is an infinite supply, the price of a good (the intersection of the supply and demand curves) tends towards zero. The problem is that the RIAA wants to limit supply to drive the price up, but they can't because there are other (unauthorized) sources that make up for the shortfall of supply. At this juncture, there are three options: (1) continue trying to artificially reduce supply by begging the government to enact harsher penalties or "three strike" laws to kick users off the Internet in an attempt to deter unauthorized file sharers or remove them completely from the Internet; (2) completely stop producing new music, thereby driving supply to zero (rather counterproductive, because there is a zero chance of making money); and (3) adapt to the changing marketplace by enacting new business models that have some chance of actually making money and making consumers happy (and thus shifting demand to the right).
The only thing the consumers decide directly is whether or not to buy the music (you can substitute any other good or service here). The rest occurs indirectly through the law of supply and demand. If consumers don't buy music because they disapprove of a particular business model, they are in effect exerting pressure through their sharply decreased demand for a change in the business model.

Re: Re: Re: Journalist

"End consumers should not be deciding what is free and what isn't, and they shouldn't be deciding which business model is right or wrong."

Sounds like your knowledge in economics is severely deficient. A central tenet of basic economics is that consumers decide what goods and services they spend their hard-earned income on ("voting with their wallets"). The "efficient mix" of goods and services produced is determined by the will of the consumer as such.

When considering the price of a good or service, the law of supply and demand comes into play. When there is an infinite supply, the price of a good (the intersection of the supply and demand curves) tends towards zero. The problem is that the RIAA wants to limit supply to drive the price up, but they can't because there are other (unauthorized) sources that make up for the shortfall of supply. At this juncture, there are three options: (1) continue trying to artificially reduce supply by begging the government to enact harsher penalties or "three strike" laws to kick users off the Internet in an attempt to deter unauthorized file sharers or remove them completely from the Internet; (2) completely stop producing new music, thereby driving supply to zero (rather counterproductive, because there is a zero chance of making money); and (3) adapt to the changing marketplace by enacting new business models that have some chance of actually making money and making consumers happy (and thus shifting demand to the right).

The only thing the consumers decide directly is whether or not to buy the music (you can substitute any other good or service here). The rest occurs indirectly through the law of supply and demand. If consumers don't buy music because they disapprove of a particular business model, they are in effect exerting pressure through their sharply decreased demand for a change in the business model.

Sorry for the double post, but for some reason my paragraphs got morphed into one big paragraph.

Re: Re: Re: Journalist

Mike runs plenty of studies that show things positive to "FREE!" and file trading, and they are just as much not representative of the real world. You seem to miss that most torrent sites are full of pirated / illegal material, it's the nature of the game.

I just wish Mike would address that issue head on, rather than pandering to those people by not discussing the obvious legal implications.

Re: Re: Re: Re: Journalist

What exactly would you like him to address about it? We all know there's lots of unauthorized content on the torrent sites. We all know copyright infringement is illegal (by definition). He has stated repeatedly he is not in favor of piracy and doesn't support it or do it. What is there to discuss?

"Lots of musicians could put together this type of model and fail for a very good reason: they're just not that good."

While I agree with 95% of what you have written here, and while I also think that Bruno is obtuse at best, now is as good a time as any to point out a common mistake that I see here:

It is quite possible to be a brilliant musician and never make a living off of your music.

This is because:

1. People like really simple repetitive music. They just do. It's how people are.

2. Musicians, especially older musicians, often tire of making simple repetitive music. This is why histories of twentieth century music are filled with names that very few people have heard: names like Ligeti and Boulez and Webern and Varese and Messiaen and Barraque and Nono and Cowell (Henry, that is) and Nancarrow.

None of these musicians made a living off of their music, because the music buying public doesn't really care about visionary musical genius.

I realize this has nothing to do with business models, and don't really expect anyone to care about any of this, but I have seen so many people write as if the statement "talent=popularity" is an obvious truth that I thought this little nuance worth mentioning.

Re:

"simple repetitive music" It's called rhythm.
Those really, really brilliant musicians you speak of that don't create "simple repetitive music" might want to throw some stupid rhythm into a song or 2 at some point if they want to make a little money. Or maybe they don't have any rhythm.

CwF+RtB & MfA+LfP

Mike, illegitimi non carborundum as they say. When the incumbent dinosaurs are criticising the mammals' small and fragile bodies, they're unconsciously signalling alarm at their agility and warm blooded fecundity.

Nothing loses the old school more sleep than the nightmare of disintermediation.

I have similar troubles persuading people of the validity of 'my' business model: "money for art, liberty for people", or MfA+LfP in your shorthand. It's a tad further away from adoption than yours - but compatible nevertheless.

May there be ever more criticism at how preposterous and unbusinesslike it is for artists to connect with fans directly, ignoring their privileges of copyright and the vast exploitation and licensing revenues that labels and societies could collect for them.

Re:

TAM the amazing TAMHOLE ...now with MORE HOLE!!

"Copyright isn't forced on the market. Artists can use CC or copyleft or anything they like."

Yes it is. According to the industry. According to the lawmakers. According to you yourself. You have not only advocated it, you have spent weeks INSISTING on it, at every turn. You dont get to now turn around and use it as an argument the other way just because of your predilection for taking the opposite view regardless of the argument.

Re: TAM the amazing TAMHOLE ...now with MORE HOLE!!

RD, you need to take your meds.

I never, ever, ever, ever, ever have said that copyright is the only answer, but legally it is the default answer. Default does not mean that you cannot make another choice. From Creative Commons, share alike, or copyleft, or any number of other options, the artist can choose to go that way.

However, in doing so, they are going against what is a default, and they should not be surprised (particularly in music) if there songs sometimes get roped together with copyright product, or are treated as such. At this point, CC music or other copyleft style things are rare as hell, and as a result, most of the players in the game don't have any real way to handle them. If the idea of CC music became more widespread (and common to popular music, not to acts nobody has heard of) I am sure that the systems in place might change.

Really, you need to start back on your meds, without them you are aggressive and forgetful.

Re: Re: TAM the amazing TAMHOLE ...now with MORE HOLE!!

TAMMY reminds me of...

Know-Nothing-Bozo, that dog from "Mostly Harmless?" friggin insanely yapping his head off and every just stands around and laughs.

Oh, and in response to Tom Landry - the MARGINAL COST of music has dropped to zero. Music itself is extremely VALUABLE, but the cost of it's reproduction has changed. Not at all the same as having no value. Tsk. We've covered this before several times...

Re: What's your point?

If that's my "What's your point?" You're responding to, Mike, sorry, that was directed at the troll, and not to you. One shouldn't acknowledge them, but I do get tired of the contrarians who show up here without anything productive to add to the conversation.

Bruno Bashes

"Agenda" journalism? I don't even know where to begin with this guy. Claiming that we need to deal with new technology and cultural changes through rationale examination "free" from ideology. Whose ideology?

Mike and his followers....

So now we are are a techie cult? Waaaiit I get it, since terrorists and criminals violate copyright to make their money and Mike has talked about copyright reform he must be a sympathizer of terrorist techies?

The tone of Bruno's post was dismissive and outright rude considering the lengths Mike has gone to formulate his opinions. I don't think this was a productive criticism, rather an outright slam job. Perhaps Mike struck a cord with him and he felt like lashing back rather than joining the conversation.

For the record I don't not believe that any form of Intellectual Property should exists. I find the concept repugnant and very anti-human at the core. So I am no "follower" of mike.

I have always considered Mike more in in the middle of this debate about future business models. Which is why it puzzles me that Bruno would respond in such a way. If ever there was a bridge between the past and the future in regards to business models it would be Mike.

"These challenges require serious thought, with rational consideration of all sides of an issue free of any ideology, not some catchy formula designed to promote an individual person or point of view. "

You mean free of any ideology that disagrees with you. You seem to be forgetting that intellectual property maximism itself IS no less an ideology than its opposite.

Re: Re: Re:

Either you're for IP or against it, I can see no middle ground. If there's one thing that 9/11 has taught me, it's that there is no middle ground.

My troll detector is usually pretty good, but then there are posts like this one. I honestly can't tell if you're serious or not. The mention of 9/11 says "60/40 in favor of troll" but then again if it were serious it wouldn't even be nearly the silliest opinion I've read here.

Re: Re: Re: Re:

> Masnick is cherrypicking examples of artists who
> have followed his formula to success through research
> and asking his readers of his blog to send in examples.
> What he's not done is print a similar list of artists who
> have tried and failed under the same model.

How does one prove a negative? Despite what Bruno seems to be implying here, we have never claimed that this model is the sure fire way to success in the industry. Lots of musicians could put together this type of model and fail for a very good reason: they're just not that good. Lots of musicians never make a living because they're not very good and couldn't make a living no matter what the business model is. But that's rather meaningless isn't it? What would a list of failures show?

This isn't really about proving a negative, it's about tautological argumentation. It's about whether CwF+RtB and the like are non-falsifiable hypotheses.

What are the hypotheses related to CwF+RtB, by the way? If they're of the form "some artists, somewhere, can make some money by using CwF+RtB" then that's a falsifiable hypothesis that I'd definitely call proven. It's also useless because it doesn't really give me any actionable information. A useful hypothesis would answer questions like "what business model will maximize my return on investment as an artist?" If you don't have a hypothesis that compares the outcome to alternatives, what good is it?

The reason you have to consider negatives is to avoid tautology. That is: if someone tries CwF+RtB and succeed then it's proof the model works. If someone tries it and fail, then it's some other thing. The artist wasn't good enough. They didn't do their marketing right. They just had bad luck. They didn't C enough or give a good enough R to B. Whatever. The question is, for whatever your hypothesis is, what evidence would falsify it? If there isn't any, then your argument is hollow.

I'm not really concerned very much with artists who aren't that good (and this is subjective anyway) and fail. What I'm primarily concerned with is the ones who are great and fail.

For example, if I spent an inordinate amount of personal effort making what is, by all accounts, a wonderful animated movie, put it out there, had it go viral, had Roger Ebert give it a beyond-glowing review, and did everything possible to C with my Fs and gave them dozens of Rs to B, and I still ended up $180,000 in the hole, what does that mean? When an artist has an international fanbase, makes millions of people happy around the world with their art, and takes home an income that's akin to the going rate for a mediocre software developer, what does that mean? What this means to me is: something is badly screwed up somewhere.

Re:

The reason you have to consider negatives is to avoid tautology. That is: if someone tries CwF+RtB and succeed then it's proof the model works. If someone tries it and fail, then it's some other thing. The artist wasn't good enough. They didn't do their marketing right. They just had bad luck. They didn't C enough or give a good enough R to B. Whatever. The question is, for whatever your hypothesis is, what evidence would falsify it? If there isn't any, then your argument is hollow.

Boom.

For example, if I spent an inordinate amount of personal effort making what is, by all accounts, a wonderful animated movie, put it out there, had it go viral, had Roger Ebert give it a beyond-glowing review, and did everything possible to C with my Fs and gave them dozens of Rs to B, and I still ended up $180,000 in the hole, what does that mean?

Re: Re:

First, Dr. Strange, great post. A fair request.

Second, AC, no, not Boom. Not headshot. Dr. Strange was saying to Mike that he needs to develop a test for CwF+RtB and use the scientific method to support it. I'm not sure if such a test can be implemented, but it's a reasonable request nonetheless. However, this is not a blow, or even an argument against CwF+RtB at all. It is the equivalent of saying "Prove it!".

Dr. Strange creates a fictional scenario of a film producer with a smash hit, does everything right, and still ends up in the hole. HE makes a valid point that this could happen. YOU act like his fictional case is the coup de grace for Masnick's theories.

Geez, it wasn't even a real case, and you are already calling the fight. If you were a boxing ref, you'd call knockout after the first fake jab.

Re: Re: Re:

Dr. Strange creates a fictional scenario of a film producer with a smash hit, does everything right, and still ends up in the hole. HE makes a valid point that this could happen. YOU act like his fictional case is the coup de grace for Masnick's theories.

What if I were to tell you it wasn't a fictional scenario at all and in fact the very same person (who is still hundreds of thousands of dollars in the hole) now has the audacity to dispense advice under Insider status on this very same blog?

What would you say to that?

If you were a boxing ref, you'd call knockout after the first fake jab.

I wouldn't call it a knockout, but I'd probably go ahead and ring the bell since the first jab is likely all you're going to see. It was far too thorough a critique for Mike to actually take up the gauntlet and respond. Such things are better left ignored than confronted.

Re: Re: Re: Re:

"What if I were to tell you it wasn't a fictional scenario at all and in fact the very same person (who is still hundreds of thousands of dollars in the hole) now has the audacity to dispense advice under Insider status on this very same blog?

What would you say to that?"

I'd say pretty much nuthin'. A single analogy in either direction doesn't prove or disprove CwF RtB.

Re:

This isn't really about proving a negative, it's about tautological argumentation. It's about whether CwF+RtB and the like are non-falsifiable hypotheses.

Sure. Any hypothesis to be legitimate or helpful should be testable, but as with any reasonable test you need to make sure you're testing the right thing.

What are the hypotheses related to CwF+RtB, by the way? If they're of the form "some artists, somewhere, can make some money by using CwF+RtB" then that's a falsifiable hypothesis that I'd definitely call proven. It's also useless because it doesn't really give me any actionable information. A useful hypothesis would answer questions like "what business model will maximize my return on investment as an artist?" If you don't have a hypothesis that compares the outcome to alternatives, what good is it?

Indeed. The hypothesis in this case is, all else equal, would a CwF+RtB business model make more money than focusing on selling just the music. I would see that as a reasonable hypothesis, and it's one I've presented here multiple times in the past. I've explained why I believe the evidence shows that it's correct from both an economics perspective, and then illustrated it with examples.

I'd like to see any evidence to the contrary.

The reason you have to consider negatives is to avoid tautology. That is: if someone tries CwF+RtB and succeed then it's proof the model works. If someone tries it and fail, then it's some other thing. The artist wasn't good enough. They didn't do their marketing right. They just had bad luck. They didn't C enough or give a good enough R to B. Whatever. The question is, for whatever your hypothesis is, what evidence would falsify it? If there isn't any, then your argument is hollow.

Again, if you can create an economic model that shows why CwF+RtB does not increase revenue compared to just selling music directly, I'd like to see it.

But that has nothing to do with what Bruno asked. He said I should present examples of those artists who failed. But that's got nothing to do with what we're talking about here.

For example, if I spent an inordinate amount of personal effort making what is, by all accounts, a wonderful animated movie, put it out there, had it go viral, had Roger Ebert give it a beyond-glowing review, and did everything possible to C with my Fs and gave them dozens of Rs to B, and I still ended up $180,000 in the hole, what does that mean?

It really depends on the scenario, and if we're talking about the one I think you're talking about, then you also left out "and was hamstrung by ridiculous copyright laws that required her to pay tens of thousands of dollars to promote songs, and then forced her not to sell more than 4,999 DVDs, thereby limiting her revenue potential" then it might be a more fair comparison. Don't you think?

If you actually did a comparison based on the hypothesis set forth above and noted that *despite* being massively hindered by the this bogus use of copyright law, she still made significantly more money off of this project than her previous projects which were not marketed in these ways... well, that certainly seems to support my thesis, does it not?

Heh.....

1. Expecting Billboard -- nothing but a propaganda rag for the "mainstream media" (read: dying corporate dinosaurs) to actually say anything relevant or informative on the subject of Intellectual "property" is pretty absurd in itself: It's an RIAA corporate rag.
For the same reason, you'll never see or hear anything relevant at the Grammys -- all you see is pampered multimillionaire shills and wannabe-shills whoring themselves to "major label" behemoths which they *already* know will screw them over.

3. If you think monopoly privileges like copyright and patent are neccesary -- let alone desirable -- you have to first demonstrate that they *are* actually fulfilling their stated purpose: DO patent monopolies *really*advance "science and the useful arts?"

Does copyright really *need* to have been extended eleven times in the past thirty years?

To even begin to make a case for defending/excusing such monopolies, you *have* to start by admitting that what is currently on the books is really, really shitty. Copyright terms are WAY to long as it is. Patents *are* mostly about corporate megaliths smashing "unacceptable" competition.

So until -- and unless -- you start by admitting that the Status quo is badly in need of *at least* reform, some of us -- myself included -- are probably going to assume that since you *actively defend* the current state of affairs AND make excuses for the corporate megaliths who have BOUGHT that state of affairs, that you actively support it/them.

Crosbie: Glad to see you posting here! Well thought out, as usual.

(I stopped even being able to give trolls like TAM and "Sam I Am" the benefit of the doubt a long while ago.

Re: Heh.....

It doesn't take long to look at Mr Albini's numbers and realize that he has his thumb on the scales, so to speak.

The big error: 250,000 records sold, but only $50,000 in tour revenue. That means $10,000 a week, and at 5 shows a week, that is $2000 per show. That would be about 100 tickets per show (at $20 each), which is just not very logical numbers for a band that pushes out 250,000 albums in the same time frame.

More importantly, he doesn't explain why you only tour 5 weeks instead of 10, 20, 30, or all year. If each band member made 4k in 5 weeks, they are on line to make 40 to 50k a year just playing music. Those aren't riches, but those are pretty decent numbers, considering they didn't have to put up the money up front to make this go.

He also doesn't point out that using the long tail theories, that album will continue to sell for years (and Nirvana has done. The next 250,000 copies will generate something like 300,000 net for the band. Oh wait, he doesn't want you to look at things realistically, just in a very narrow way.

Further, he also doesn't address the number of acts that the label puts up the money and they never sell worth shit. For every success, there are how many failures? Let's say it's 3 to 1. Guess what? The record labels only broke even by his numbers, because they made $719,000 against $250k up front this time, but the next 2 lose them the $250k, netting them nothing.

Bruno Vs. Masnick annd Beyond

Your connecting with fans, giving them a reason to buy and then an artist will make money little ditty has been effective to focus creative, artistic non business personalities on a simple philosophy for success they should all be able to grasp. There is no rocket science here, only an obvious concept stated to a well defined group who needs to hear it. Otherwise, it's unfortunate that two rather smart guys allowed themselves to devolve into a who has the biggest balls verbal altercation. I have seen your live presentation and viewed various videos of yours and have read your blog when it talks about the music business. I know you are brilliant, informative and entertaining but, if truth be told, you are not really giving the average artist any kind of take away that helps them execute a strategy to build a fan base so they can have a shot at making some money. It's great to offer perspective on various artists and their personal success stories. However, what would be great is if you would put your fine mind to work on how emerging artists, with great music and a live show can actually connect with people who can become their first fans and how they can develop a business from this point and what it is they really need to do to accomplish this. Today's rtists need all the help they can get to cut through the clutter and noise of the DIY music space. You need to be a part of this solution. What suggestions can you offer to help figure this particular problem out. Thanks

Re: Bruno Vs. Masnick annd Beyond

f truth be told, you are not really giving the average artist any kind of take away that helps them execute a strategy to build a fan base so they can have a shot at making some money.

Hmm. We did a big post the other day on how to find scarcities. Did that not count? I've done a huge post specifically on how to use these things, and people told me it was crap because it didn't cite any examples. Now I cite examples and you're telling me that it's no good because it doesn't explain how to do things? I'm sorta confused by this one...

In fact, my whole workshop at Midem was last week was exactly what you claim we don't do: it was to have individuals in the audience pick artists and walk through exactly how to help them specifically come up with a new business model.

"What he's not done is print a similar list of artists who have tried and failed under the same model. "

Well, if someone provided that, I could probably provide a much larger list of musicians who signed with a major label and failed. I wonder if he'd consider that a sign of that model's failure...

"I don't write about most of them any more because it's not news."

It might be a bit too much work, but it may be useful to set up a page listing those artists. Maybe a link to the artist's site with a sentence or 2 describing their particular model. Copy and paste the emails you decide not to write about, and you'd have a long list you can point to if anyone accuses you of cherry picking.